ADNOC signs long-term deal with China for base oil

Abu Dhabi National Oil Company (ADNOC) said it has concluded a long-term sales agreement with the Xiamen Sinolook Oil Co., of China, for its high-quality base oil, ADbase.

In line with ADNOC’s strategy to maximise value from its downstream refining and petrochemical operations, ADNOC Refining, an ADNOC subsidiary, produces up to 500,000 metric tonnes per year of Group III base oil, at its Ruwais refining and petrochemicals complex. Group III base oils are typically used to manufacture top-tier, high-performance engine oils. The company also produces around 100,000 metric tonnes per year of Group II base oil.

Ahmad Bin Thalith, acting senior vice president of Refined Products Sales, in ADNOC’s Marketing, Supply and Trading Directorate, said: “The signing of this important sales agreement, with a major base oil consumer and distributor in a large and growing market, marks another significant milestone for ADbase. This agreement once again underlines ADNOC’s commitment to delivering the highest-quality products and service, while achieving the best commercial value through innovative and competitive marketing strategies, expansion of our client base and penetration of new markets.”

Established in 2011, Xiamen Sinolook Oil Co. Ltd. is one of China’s biggest importers and distributors of base oils, with a 5 per cent share of the 7.17 million tons per annum market. In 2018, demand for base oils across China increased by 6.4 per cent and is forecast to grow by more than 6 per cent in 2019.

Qingchun Lin, general manager, Xiamen Sinolook Oil Co., said: “We have been importing Group III base oils produced by ADNOC since 2016, and we have more than 300 end-user customers throughout China. We have great confidence in the quality and reliability of ADNOC’s base oil products and believe that ADbase can help meet the growing demand of the Chinese market for high-quality Group III base oils.”

The signing of this agreement follows the signings in 2017 and 2018 of agreements with Penthol C.V. and Chemlube for the supply of ADbase into the United States of America and Europe.

Murban, Abu Dhabi’s light, high paraffinic crude, is used as feedstock for ADNOC’s Base Oil plant in Ruwais, which ensures a consistent, high-quality product. ADbase has a high Viscosity Index (VI) making it an ideal lubricant component, ensuring efficiency and fuel economy for high-performance engines, while meeting ever-stringent environmental regulations.

ADNOC has already completed API SN approval, GM Dexos 1, ILSAC GF-5, and 0w-20 for full synthetic motor oils, and is actively working with additive companies to achieve Original Equipment Manufacturers (OEM) and European Automobile Manufacturers Association (ACEA) formulation approvals.